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How Did The Economic Conditions Affect The Economy Of 1873

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In the early 1870’s, Germany stopped making silver-backed Deutschmarks, backing all of their currency to gold. This decreased the price of silver worldwide. In 1873 U.S. congress followed Germany’s example and passed the Coinage Act, which gradually took all silver-backed currency out of circulation. The U.S. Treasury produced $26 million dollars of greenbacks, the economic effect was a decrease in capital available to all investors. Access to currency and credit was cut off greatly, causing interest rates to skyrocket.
The first sign of trouble was on September 8, 1873, when the New York Warehouse and Securities Company closed. Within the week, financier Daniel Drew’s firm, Kenyon, Cox, and Company did the same thing. It was when Jay Cooke

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